Consumer sentiment is improving in India, even though the COVID-19 pandemic has continued to worsen, stated Boston Consulting Group (BCG) and reported by Indiaretailing Bureau.
‘Cautious living’ is emerging as the new theme, where consumers are beginning to feel that it is time that they need to resume their activities albeit with a lot of caution, indicated the BCG report titled ‘COVID-19 Consumer Sentiment Research’.
The revival is stronger among lower-income segments and lower-tier cities, said the report, which has covered around 3,000 respondents across metros and Tier I/II/III & IV cities from July 20 to August 2, 2020. Around 44% of consumers think their income in the next six months will be lower than pre-COVID levels – significantly lower than 57% in the last round conducted over May 18-23.
“Similarly, the sentiment about spending is beginning to look better. The latest round had 42% consumers expecting their spending over the next six months to be lower, compared to 53% in the last round,” the report indicated.
There is also a pickup in routine activities with 53% consumers stating that they have been going out to work and 66% consumers saying that they have been visiting friends in the latest round as against 15% and 10%, respectively, in the last round. “Majority of the consumers, however, say that the frequency of most of these activities is still not at the pre-COVID levels.”
This is the fifth round of the survey, which assessed the overall changes in behaviour across a large set of categories and daily lifestyle. It also tracks overall consumer sentiment towards COVID-19.
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Commenting on how consumer sentiment is improving in India, Kanika Sanghi, lead, centre for customer insight for BCG India said, “We are beginning to see a change in the consumer sentiment. The overarching feeling in all the previous rounds of the survey had been more around fear, worries about the economy and their own incomes, whereas the latest round speaks much more about learning to live cautiously with the virus.”
The extent of revival is much faster in smaller cities. Across metrics, Tier II and below towns show faster pick-up. “For example, 52% of consumers in Metro and Tier I think their income will be lower, while only 41% in Tier-II and below think the same. Similarly, 36% of small-town consumers are going to local markets for essentials shopping as much as they used to pre-COVID, compared to 27% in metro and tier I.”
The spending sentiment has improved across many categories. While essentials, health, in-home entertainment continue to be winners, there is an uptick in sentiment across many semi-essentials like personal care, packaged food as well as discretionary items like apparel, cosmetics, auto, consumer electronics. Travel and out-of-home entertainment, on the other hand, continue to show little to no improvement.
Meanwhile, the strong acceleration in e-commerce continues. As per the survey, around 20% of new users have been added to the universe of online shoppers in the last three-four months. Many of the categories have seen an even faster acceleration – with fresh foods, staples seeing up to 40-50% new users.
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